Category Archives: Budget Shortfall

Hold Onto Your Wallets, Middletown To Introduce Budget That Includes a 12.2% Tax Increase


Hold onto your purse strings and wallets ladies and gentleman, I got my hands on the proposed 2010 Middletown Municipal Budget before its introduction and as we have been saying for a long time now, it isn’t pretty!

The budget that will be introduced during the Special Budget Introduction Meeting tonight at 7pm will total nearly $65M and will reflect a spending increase over last years budget of 4.9%, it calls for a 12.2% tax increase that will raise $5.55M to fund it!

As I said it isn’t pretty, I spent a few hours reviewing it after I requested a copy of it from Committeeman Sean Byrnes, who was nice enough to forward it to me in advance of the budget meeting. In the email that accompanied the budget Byrnes wrote:
“…much of this was foreseeable, pension increase $1.8M, payback $800k from 2009, salary increases $1.5M, health care increase $1.6M, these total over $6.0M. No surprise. We knew this in 2009 and yet they refused all my recommendations including fixed fee legal retainer, bidding out engineering work, cutting Middletown matters, cutting Middletown day, contracting out leaf and brush, consolidating maintenance and refusing finance cmte. Even now we should be assuming the governors tool chest will pass and we should be planning accordingly…”

Why the big increase, what are the driving forces behind the budget? In addition to what Sean Byrnes stated, nearly every appropriation line item in the budget saw an increase of some kind even though most revenues streams dried up.
Not surprisingly, after the mayor took such a public stance against the MTEA after April’s defeat of the school budget, taking his lead from Governor Christie and insisting that the teachers accept a wage freeze and contribute to their health benefits, the largest overall increase in the budget after the increase to the health and pension funds were Salaries and Wages paid out to employees who will enjoy an 8.9% increase over last year!
If you doubt what I say, you can print out a copy for yourself >>> Here and see for yourself.
If you plan on attending the budget introduction meeting bring a copy of the budget with you, along with your questions in order to ask the mayor why he and others on the Township Committee have done such a poor job in preparing for and planning this budget. If they would have heeded Sean Byrnes and former Committeeman Patrick Short’s advice over the past year and leading up to the introduction of this budget, the situation we find ourselves in today may not have been so costly to residents.

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Filed under budget deficit, Budget Shortfall, Middletown Township, Patrick Short, Sean F. Byrnes, special budget meeting, tax increase, tax revenues

Middletown Township Still ‘Crunching The Numbers’ As Budget Gap Widens

Excellent article written by Ryan Fennell of the TRT, the kid reports it straight with no spin and consistantly reports on important aspects of the Township Committee meetings without having to resort to press releases issued after the meetings are over.

By Ryan Fennell
The Two River Times

MIDDLETOWN – While no specifics have been released regarding the 2010 budget, the Middletown Township Committee intimated on Monday night that layoffs were imminent in order to bridge the estimated $4 million shortfall in revenue.

The Middletown Township Committee entered this year facing an approximate $4 million shortfall, which Committeeman Sean Byrnes now estimates to be closer to $6 million, in revenue for the 2010 budget. Since that time the Committee has hired a new CFO and consistently pledged to the township’s residents that it was “looking at everything.”

“We are now almost three weeks into April and we know as a Committee that we have a significant shortfall in revenue this year,” Byrnes said. “The news is only getting worse and as of right now I don’t think we’ve really executed on any plans. Our ability to see any kind of savings is hampered by the fact that time is passing.”

Mayor Gerard Scharfenberger said that he has been in contact with Governor Chris Christie’s chief of staff and has been assured that legislation is being crafted that would ease the situation for the township.

“He assured me that the ‘mayor’s toolbox’, so to speak, that will allow us to absorb some of these cuts is still in the process of being formulated. We’re hoping this will provide some relief and extensive policy out of Trenton that will allow us to get back on track.” Middletown resident Jim Grenafege was not satisfied with the explanation and challenged the committee to offer concrete solutions or information regarding the budget. “Its just week after week there is nothing concrete happening,” Grenafege said.

He asked that the committee provide numbers associated with proposals that have been offered by the committee that could potential cut the budget.

“We have a relatively new CFO and he’s still crunching the numbers,” Scharfenberger said. “We can’t quantify anything that’s been proposed when I don’t have the numbers to quantify it against. These are sound proposals. There’s no sense speculating.”

Grenafege charged that the committee was speculating with the proposals. “They’re speculation with no numbers associated with it. It’s disingenuous to make these proposals without saying and here’s what we expect to save.”

Township Administrator Anthony Mercantante said that there are concrete things happening regarding the budget. “We’ve discussed a lot of options for saving money. A lot of them are painful. A lot of them are painful to individual people. It wouldn’t be fair to speculate publicly about some of the things happening.” Resident Jeff Blumengold asked why the committee hasn’t at least started cutting the “low hanging fruit.”

Scharfenberger noted that Middletown operates on a workforce of approximately 340 employees which costs the township $872 per person, a low figure for a municipality it’s size.

“There’s not a lot of low hanging fruit,” Scharfenberger said.

Scharfenberger also pointed out that the Township experienced 15 retirements since January and could see as many as 20 by year’s end. Scharfenberger said that these retirements have affected the budget and eliminated areas to cut.

“We had no idea that was going to happen,” Scharfenberger said of the retirements. However, the Committee had expected and even encouraged its employees to retire in May 2009.

On May 18, 2009 the Committee unanimously adopted an ordinance entitled “Early Retirement Incentive for Eligible Township Employees.”

The ordinance encourages employees eligible to retire under the Public Employee Retirement System (PERS) with the offer of health benefits upon retirement after 15 years of service with the township, lowered from 20 years of service.

According to the ordinance any employee who is eligible to retire who has 15 years of service shall have the entire cost of health benefits assumed by the Township of Middletown upon retirement. The ordinance has a “sunset provision” that sets December 31, 2010 as the expiration date.

“The process is the problem,” Byrnes said. “There is no process in place to get ahead of the things we’re talking about. We knew it was going to be bad. It’s very, very frustrating. I can’t fathom how we haven’t planned out for the problems we’re facing.”

“Now we will lay off people and those numbers are probably going to be bigger than they needed because we’re starting later than we should have,” Byrnes added.

“The silver lining in all the bad news we’ve been confronting is that people are starting to engage,” Byrnes said. “People seem to be paying more attention to what’s going on. That’s a good thing. Part of the problem of what we’re in now is people didn’t pay attention and that is the key to getting out of the very dire situation we find ourselves in.”

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Filed under budget cuts, Budget Shortfall, Gov. Chris Christie, Jim Grenafege, Mayor Scharfenberger, Middletown, Ryan Fennell, Sean F. Byrnes, Two River Times

Letter: Is Middletown’s Mayor Attempting To Divert Bond Money Away From Sports Fields

The following letter was received in my email last night:

Middletown is engaged in a controversy over the installation of artificial turf fields, but the debate is indicative of a much larger issue with how our Township spends taxpayer dollars.

The Township took out a bond in 2006 to fund the turf fields, but the money has sat idle, accruing interest on repayment, because Middletown failed to reach consensus on where to locate the fields. During a number of Township Committee meetings, the Mayor, Administrator, and Township Attorney all emphatically stated that the bond could only be used for the rehabilitation of fields at Middletown parks. However, objections to this usage have recently intensified, prompting Mayor Gerry Scharfenberger to announce he would call off the field construction and divert the bond funds to pay for shortfalls in the Township budget. I have serious concerns about the Mayor’s new course of action.

First, the Mayor appears to be acting independently of the Township Committee. Our committee consists of five members, one of whom is selected as Mayor to lead public meetings and sign local legislation. Nowhere in Chapter 4, Article II of our Township Code, which outlines the duties of Mayor, does it give that person authority to make solitary decisions on funding. A vote of the full Committee is required.

My second concern is that the Mayor, Administrator, and Township Attorney have been lying to residents about the potential uses for the bond money. First, they insisted the money could only be used for the turf fields. Now, the Mayor wants to try and amend the ordinance so it can be used for other projects. If Mayor Scharfenberger has not been deliberately misleading us, he, at best, does not care enough to understand the rules on spending taxpayer dollars; at worst, he is incompetent.

Finally, I am concerned about using bond money to patch holes in Middletown’s budget due to shortfalls in state aid. A single bond will not fix the fiscal reality our township must face as a result of the national economic downturn. The Mayor must stop looking for quick, politically convenient, fixes and present to township residents a fiscally sound plan that does not place us further in debt. Perhaps it is time to stand up that Finance Committee that Committeeman Sean Byrnes keeps calling for. When will Middletown’s Mayor start to listen to the Committee, which represents all taxpayers, and stop acting alone?

Don Watson
New Monmouth NJ

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Filed under artificial turf fields, Budget Shortfall, Finance Committee, letter to the editor, Mayor Scharfenberger, Middletown

Speaking Of Budgets, Middletown’s Is Done Through Osmosis

Back on Reorganization day in January, one of the many things that Gerry Scharfenberger addressed during is speech after being re-appointed as Mayor of Middeltown, was the upcoming budget process.
He told the crowd in attendance that the Township was facing a huge budget shortfall of nearly $7 million but not to worry because there was a plan on how to deal with it.
He state that even though …“no one here is a super expert on finances by profession but if you sorta do it by osmosis…”
Which I suppose means, that if you sit around long enough thinking about it, to let it sink in you become a expert in how to deal with a $7 million deficit without a Chief Financial Officer to help in the process! Unfortunately however the process of osomsis isn’t good enough now that budgets need to be submitted to Trenton by the end of the month.
Where’s a Finance Committee when you need it? Oh that’s right, Middeltown doesn’t need one because Gerry and the boys can handle the budget process on their own.

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Filed under Budget Shortfall, Chief Financial Officer, Finance Committee, Mayor Scharfenberger, Middeltown Township, osmosis

Scharfenberger Admits "… a budget shortfall of several million dollars in the coming year."

Not many surprises happened yesterday at Re-Organization day in Middletown other than re-appointed mayor Gerry Scharfenberger admitted during his address that the Township was facing “… a budget shortfall of several million dollars in the coming year.”

This statement is really quite out of character for our mayor because for the past couple of months Committeeman Sean Byrnes and former Committeeman Patrick Short have been warning everyone about this on coming problem,while Scharfenberger and his fellow GOPer’s have accused the Democrats of playing “Chicken Little” .

Last months workshop meeting received a lot of headlines in local papers because Byrnes and Short would not vote for borrowing money from 2010 ‘s budget for an emergency appropriation to pay for medical claims in 2009 without first seeing a plan on how the township planned on closing, in Byrnes’s estimation, a $5 million budget shortfall 2010. Byrnes stated during the workshop meeting that layoffs throughout all departments would be necessary without some type spending plan for the coming new year.

They ultimately voted to approve $800,000 of the emergency appropriation to pay the medical claims and deferred the remainder to discuss at the next meeting with the stipulation that the township needed to come up with some sort of spending plan before than.

At the December 21st Township Committee meeting Byrnes and Short once again refused to borrow money from 2010 to pay for the outstanding claims because nothing was presented during the two week period since the previous meeting to show them that the township was taking seriously the looming budget crisis.
Now upon his re-appointment as mayor he admits that there is a looming crisis and wants to assure everyone that he will do everything in his power to make the best of it by “…a continued freeze on all township salaries, the potential sale of unneeded township assets, increased worker contributions to health benefits, new interlocal agreements and the sale of the township swim club.”
We’ve heard all this before from Scharfenberger and his GOP buddies, the only new proposal here is to sell the swim club and that was proposed 3 years ago by Patrick Short.
Last February Patrick Short and Sean Brynes submitted budget cutting ideas to the Township Administrator and the CFO and many if not all were rejected out of hand.
Last week Sean Byrnes issued a press release to highlight some additional proposals that he believes would save the township money for 2010 and years to come. They are practical and make sense. Maybe the Committee can use these proposals as a starting point when they begin to formulate the 2010 budget and not let partisan politics get in the way of doing what’s right for the residents of Middletown.

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Filed under Asbury Park Press, Budget Battle, budget cuts, Budget Shortfall, Democrat, Gerry Scharfenberger, Middletown, Middletown Republicans, Sean F. Byrnes, tax increase, the Independent

Press Release: Committeman Sean F. Byrnes Calls For Sweeping Changes To The Way Middletown Does Business

Press Release

December 21, 2009
In Middletown today, Committeeman Sean F. Byrnes called for sweeping changes to the way Middletown does business. Since joining the Committee in 2008, Byrnes has continuously called for the creation of a Finance Committee to oversee the preparation of Middletown’s budget, evaluate expenses and investigate restructuring how services are delivered. However, his efforts have failed to garner support from Republican members of the Township Committee.
Citing the worst budget environment in the Township in 20 years , Byrnes called on his fellow Committee members to make dramatic changes to the way the Township does business:
“We find ourselves sinking deeper into debt with fewer tools for pulling ourselves out. Last year, we limped through the year relying upon one-time revenue line items, a request to exceed our cap on increasing tax levies to citizens, and a decision to defer $1.5 million in pension contributions. Yet, by year’s end, we still needed an emergency appropriation of $1.4 million, payable in 2010, to pay escalating health care expenses. I am estimating that we begin 2010 with a shortfall that approaches $5.0 million. We will need a specific plan, very early in the year to offset this shortfall.”
To address the looming budget shortfall, Byrnes has recommended exploring the following cost-saving measures:

  1. Requiring all capital spending projects in 2010 to be competitively bid among 5 pre-approved engineering firms.
  2. Retaining the Township attorney and other professionals to operate on a fixed fee monthly retainer basis and eliminate all hourly billing for all but complex litigation.
  3. In 2010, combining the property maintenance functions within Public Works and the Parks & Recreation Department into one Department within the Department of Public Works, responsible for all property maintenance.
  4. In 2011, combining the property maintenance functions currently operated separately by the Board of Education and the Township Committee into one department to maintain all property within the Township.
  5. Eliminating the Sewerage Authority thereby eliminating the administrative, overhead and professional fees associated with the operations of this Authority.
  6. Soliciting private contracts for 50% of the leaf and brush pickup in 2010 and a larger percentage in ensuing years.
  7. Shifting to a once per week trash pickup in conjunction with mandatory recycling of paper and a campaign to encourage a far greater percentage of composting within the Township. Reducing the volume of paper and vegetable waste will substantially reduce the volume of disposable waste and the need for more than one trash pickup per week.
  8. Offer early retirement to the more senior maintenance workers in the Parks & Recreation Department and Public Works Departments where salaries in the Parks & Recreation Department dedicated to property maintenance exceed $1.0 million.
  9. Commence discussions with the Library Board to consolidate the Arts Center operation into the Middletown Public Library, which has a steady funding source and currently offers arts programming that is similar to programs offered by the Library.
  10. Continue the initiative started by Committeeman Fiore to negotiate a new health care payment arrangement, as the existing self-insured relationship for claims has produced double-digit increases in costs that cannot be sustained.
On a County-wide basis, Byrnes has recommended a consolidation of police, fire and school administration.
“The taxpayers cannot sustain the spiraling salary, benefit and pension costs that follow the large administration that oversees the delivery of police, fire and educational services. We need our locally elected State representatives in Monmouth County to propose State-wide legislation that gives counties and municipalities the ability to engage in consolidation efforts and other cost-sharing measures. The current statutory and regulatory framework ties the hands of municipalities that might be willing to take bold steps to cut costs. ”
Mr. Byrnes also pointed out that two Township officials, Deputy Mayor Scharfenberger and Township Attorney Brian Nelson have been appointed to the transition team for Governor –elect Christie.
Citing the rare opportunity presented by the current economic climate and voter dissatisfaction, Byrnes said, “I am hopeful that Mr. Scharfenberfer and Mr. Nelson will seize this opportunity and advocate for sweeping changes to the laws that foster duplication and overlap of governmental services. As an example, the legal separation of Boards of Education and municipal government is too stark. There must be greater shared services between these public entities and even some degree or merger of some functions such as property maintenance, recreation, human resources and purchasing.”
“The old system is broken, everyone knows it, and we need to be creative and willing to re-design how services are delivered to taxpayers at the local, county and state level. If we do it right, the end product will look a lot different than what we have right now.”

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Filed under Budget Shortfall, Chris Christie, Middletown, New Jersey, press release, Sean F. Byrnes

It’s Payback Time In Middletown: So Far Township Facing $4 Million Budget Shortfall For 2010 – Layoffs Pending

I attended the Middletown Township Committee Workshop meeting last night to hear what would be said about the Emergency Appropriation Resolution 09-277.
This resolution was for the purpose of borrowing ~ $1.5 million from next years budget to pay for worker’s compensation claims and other employee medical benefits that the township did not budget for this year.
There was a lively discussion on the subject that lasted nearly an hour. Committeemen Sean Byrnes and Patrick Short questioned the Township Administrator about how and why, with less than 30 day left in the calendar year, did the township find that it needed to borrow such a large amount of money against next years budget when the projected budget for next year was already a few million dollars short.
The simple answer was the Township did not foresee that worker’s compensation claims and other employee health benefit claims would be at such a level as to need more money than budgeted for in the previous year’s (2008) budget. And after all, the bills needed to be paid.
The money that was set aside this year for health benefits and claims was ~ $2 million less than last year. The reason being was because recent trends over the past several years showed that health claims rose and fell from one year to next. With this in mind, the powers that be who shaped the 2009 budget decided to gamble on the trends downward slope and under funded the Township’s health care plan.
In the 2008 budget ~ $6 million was appropriated for benefits but at the end of the year, much like this year, an emergency appropriation 0f $500,000 was needed as opposed to an ~ $1.5 million. I would say that their gamble did not pay off.
Committeeman Byrnes was relentless in his questioning and would not support the resolution as written without assurances from the rest of the committee that further review of township finances would be made before the end of the year. To get these assurances Byrnes only agreed to support a resolution for $800,000 of the $1.5 million emergency appropriation at last nights meeting. The other $700,000 will be appropriated through a new resolution at the December 21st committee meeting if Byrnes receives proper answers to his questions about how next years budget will be addressed.
The reason why Sean Byrnes is being such a stickler over the 2010 budget is because at this present time it is being projected by the Township Committee, that there will be a minimum of a $4 million shortfall in revenues next year with this resolution and by the time January or February comes around it could be a couple of million more dollars short.
When Byrnes pressed the Township Administrator over what plans he intends to present to the Committee to curtail costs next year the administrator, Tony Mercantante said that among other things, plans were in the works for employee layoffs starting in either January or February of 2010 but paper work must first be filed with the State before any layoffs could take effect.
With this in mind I have to ask once again, why not listen to Sean Byrnes and establish a nonpartisan Finance Committee that could identify problems like this in advance and work towards budget solutions before they become problems in the first place?

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Filed under anca, budget resolution, Budget Shortfall, Finance Committee, Middletown, Patrick Short, Sean F. Byrnes, Tony Mercantante